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GBP/USD – 1.3262

Sterling continued heading north and broke above recent high at 1.3269, confirming the medium term erratic rise from 1.1986 low has resumed and bullishness remains for this move to extend further gain to 1.3300-10, then towards 1.3350-55 (50% projection of 1.2109-1.3269 measuring from 1.2774), however, reckon upside would be limited to previous chart resistance at 1.3445 and price should falter well below dynamic resistance at 1.3500-05 (50% Fibonacci retracement of 1.5018-1.1986), risk from there is seen for a retreat later.

Our preferred count on the daily chart is that cable's rebound from 1.3500 (wave (A) trough) is unfolding as a wave (B) with A ended at 1.7043, followed by triangle wave B and wave C as well as wave (B) has possibly ended at 1.7192, below support at 1.4232 would add credence to this count, then further fall to 1.4000 level would follow but reckon downside would be limited to 1.3655 support and price should stay above previous support at 1.3500.

On the downside, whilst initial pullback to 1.3200 cannot be ruled out, reckon downside would be limited to support at 1.3161 and bring another rise later. Below 1.3080-85 would defer and risk correction to 1.3015-20 but still reckon downside would be limited and as long as 1.2996 (previous minor resistance) holds, prospect of another rise remains. A drop below 1.2996 would defer and suggest top is formed instead, risk weakness to 1.2950-60 and possibly test of support at 1.2909 but price should stay above support at 1.2852, bring rebound later.

Recommendation: Buy at 1.3165 for 1.3365 with stop below 1.3065.

 
Longer term - Cable's rise from 1.0520 (Feb 1985) to 2.0100 (September 1992) is seen as [A], the decline to 1.3682 is labeled as (B) and (C) wave rally has ended at 2.1162 (9 Nov, 2007) which is also the top of larger degree wave B with circle. The selloff from there is a 5-waver with wave (A) ended at 1.3500 (23 Jan 2009), wave (B) itself is labeled as A: 1.6733, triangle wave B: 1.4813 and wave C as well as top of wave (B) ended at 1.7192 (2014), hence the selloff from there is an impulsive wave (C) with wave I : 1.4566, wave II 1.5930, an extended wave III is unfolding and already exceeded our downside target at 1.3500 and 1.3000, hence weakness to 1.2500 and possibly 1.2000 cannot be ruled out, however, price should stay well above psychological level at 1.0000.

USD/CAD is consolidating. Hourly support is located at 1.1945 (29/04/2015 low). Resistance is now given at a distance at 1.2778 (15/08/2017 low). Expected to show continued short-term bearish pressures.

In the longer term, the pair has broken longterm support that can be found at 1.2461 (16/03/2015 low). Strong resistance is given at 1.4690 (22/01/2016 high). The pair is likely to head further lower.

USD/CHF is trying to bounce. Strong resistance is given at 0.9771 (15/06/2017 high). The pair is likely to head further lower below 0.9421 (03/05/2017). Expected to show renewed bearish pressures.

In the long-term, the pair is still trading in range since 2011 despite some turmoil when the SNB unpegged the CHF. Key support can be found 0.8986 (30/01/2015 low). The technical structure favours nonetheless a long term bullish bias since the unpeg in January 2015.

USD/JPY is consolidating higher but the trend is clearly negative. Strong support is located at 106.95 (08/09/2017 high). Expected to show further downside pressures.

We favor a long-term bearish bias. Support is now given at 99.02 (10/08/2013 low). A gradual rise towards the major resistance at 125.86 (05/06/2015 high) seems unlikely. Expected to decline further support at 93.79 (13/06/2013 low).

GBP/USD is trading mixed around 1.3200.. Strong support is given at 1.3023 (06/09/2017 low). Expected to show continued short-term bullish pressures toward resistance at 1.3267 (03/08/2017 high).

The long-term technical pattern is even more negative since the Brexit vote has paved the way for further decline. Long-term support can be found at 1.1841 (07/10/2017 low). Long-term resistance is given around 1.35 and would indicate a long-term reversal in the negative trend. Yet, it is very unlikely at the moment.

EUR/USD lies in a bullish trend. Hourly resistance can be found at 1.2092 (08/09/2017 high) while hourly support lies at 1.1823 (31/08/2017 low). Stronger support is given at a distance at 1.1662 (17/08/2017 low). Expected to show renewed bullish pressures.

In the longer term, the momentum is now turning largely positive. We favour a continued bullish bias. Key resistance is holding at 1.2252 (25/12/2014 high) while strong support lies at 1.0341 (03/01/2017 low).

The common European currency continued its decline against the US Dollar, as it was expected on Monday.

On Tuesday morning the pair had already rebounded against the combined support of the medium pattern and the 200-hour SMA near the 1.1940 mark. Due to that reason a surge was expected.

However, the rebound is most likely going to be hindered by the 100-hour SMA until the pair reaches the weekly PP at 1.1999, which will be supported by the 55-hour SMA.

Most likely that combined resistance will force the rate to continue the decline.

The GBP/USD currency pair was characterised by a lack of volatility on Monday. The Pound tried to surpass the monthly R1 at 1.3208, but failed to do so for the second consecutive time. Subsequently, it was pressured down to the 55-hoour SMA which managed to support the rate effectively and return it near the aforementioned monthly R1.

Technical indicators suggest that this level should not be surpassed. Nevertheless, the UK CPI release scheduled at 0830GMT might introduce some changes to this assumption, especially if data turn our to be solid.

By and large, the appreciation that was apparent on Tuesday morning should be followed by a decline in price, setting the 100-hour SMA as a possible bottom target for this session.

In line with expectations, the US Dollar surged against the Yen on Monday, resulting in a 117-pip appreciation within one day. The pair crossed several resistance levels, including the 200-hour SMA at 109.30, and has since showed lack of volatility during this morning. This minor consolidation phase might suggest that bulls have exhausted their upward force and thus give the dominant hand to bears instead.

The upside is guarded by the monthly PP and the upper boundary of a channel down circa 109.80—a level that might be a turning point for the rate. Subsequent direction is expected to be to the downside.

In case no massive events shake the market, the rate might continue its movement sideways for several hours before dashing towards the 100-hour SMA at 108.60.

The bearish scenario came true on Monday for the yellow metal. The bullion's price fell below the 1,330 mark in the second half of the day's trading session.

If one looks at the hourly chart, a marvelous sight appears, as the metal faces no support as low as the 1,312.43 level on Tuesday morning. However, that is not likely going to be the support, which stops the decline of the commodity price.

It is more likely that the bullion will continue in the angle, in which it has been declining for the past few trading sessions, until it reaches the support of the dominant channel up pattern somewhere between 1,315 and 1,320.